“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

The High Cost of Free Parking Chapters 1-4

Here’s the first installation of Market Urbanism Book Club, covering the first four chapters of Donald Shoup’s The High Cost of Free Parking. If you’ve read the book previously or are reading along, please share your thoughts and questions in the comments.

Chapter 1:

Shoup outlines the unusual view that we take toward parking. Rather than assuming that demand for parking, like any other good, is a function of its price, urban planners typically assume that parking is a zero-price good and require building owners to provide enough parking to meet demand given a zero price. Imagine that this was the way we treated other goods… This Friday afternoon I’m thinking of a municipality that requires bars to provide their customers with as much beer as they’d like at a zero monetary cost.

Shoup points out that of course we pay for the cost of all this parking, only drivers do not pay this price in their role as drivers. We pay for it as a tax on housing, retail goods, and in the form of lower wages as workers. Those who pay the highest tax are of course non-drivers. Some drivers are subsidized under this system with the highest subsidy going to drivers who make frequent, short car trips.

He explains that off-street parking requirements developed as the demand for zero-price curb parking outpaced supply. This is a classic case of the Tragedy of the Commons. Because no one had property rights of street parking, it was overused. Rather than charging for this scarce resource, or allowing building owners to provide their customers with parking at profit-maximizing prices, city governments turned to regulations.

Chapter 2:

In this chapter, Shoup really gets to the core of the problems that government employees face when they try to provide consumer goods. Some parts of this chapter sound like they could have come from Hayek. Planners have no idea how much parking each building will attract at peak demand, and they typically fail to consider the cost of providing this parking. Planners have two primary resources to turn to for determining parking minimums, copying other cities’ minimums, or using the figures provided by the Institute of Transportation Engineers. Neither of these strategies account for the unique and local variables that will influence demand for free parking on a lot by lot basis.

Shoup calls this process “unnatural selection.” Rather than making mistakes and adapting, planners relentlessly repeat the mistakes of other planners in setting parking regulations. In any case, when planners are uncertain about the method to use to determine parking requirements, they tend to play it safe and overestimate.

So far, I’ve found the most interesting part of the book to be his analysis of ITE studies. Their parking recommendations come from extremely small sample sizes, most less than five, of suburban parking lots where no public transportation is available. In other words, their recommendations are likely meaningless, especially for more densely built neighborhoods or those where public transportation is available.

Most ITE parking recommendations are based on the building’s floor area, even though their own data show that this variable is almost unrelated to parking demand. I am not familiar with their reports outside of what I’ve read from Shoup so far, but he’s made me want to investigate. It sounds as if over the years their reports have gone from poor statistical methods to downright dishonesty. ITE reports now exclude regression results whenever they find cases where parking demand is negatively correlated with floor area, further obscuring the fact that this variable is not a good indicator of how much parking buildings shold be required to provide. Additionally, these reports used to include a warning that readers should use caution in applying their parking studies to other uses, but these warnings have been dropped.

Shoup describes ITE work on parking demand as junk science, but points out that once this junk science becomes the law of the land, its origins become irrelevant.

Chapter 3:

In this chapter, Shoup develops the reasons that planning for parking is scientism (not his word). He explains the factors that lead cities to systematically provide more than the optimal amount of parking by relying on the level demanded on the busiest day of the year, meaning that parking in many retail lots is oversupplied 364 days of the year.

He explains that because we can observe that developers rarely choose to build more parking than required and often seek to build fewer parking spots but are denied variances, we have strong evidence that parking requirements lead to more parking that the market would provide. He also details the high cost of providing parking when land has a high opportunity cost. He cites an example of a Los Angeles example where the required parking adds $104,000 to the cost of each apartment(!). Of course this added expense goes into the cost for all building residents, whether or not they drive or have only one car.

Chapter 4:

In this short chapter, Shoup compares city planners to early astronomers who came up with misleading but convincing models of planetary orbit. By providing precise parking requirements, city planners give the impression that they can accurately forecast parking demand before a building’s construction. He emphasizes that he is criticizing the practice of parking requirements, not planners as individuals, a distinction I share.

Thoughts so far:

I highly recommend this book based on my initial impression. Shoup offers a persuasive and detailed analysis of the reasons that planning for parking doesn’t work and explains the origins of current regulation. My one concern is that while he expertly identifies the problems with setting parking minimums, he doesn’t extend this logic at all to city planning generally or even planning for parking generally. I’m getting the impression that he supports parking bans in center cities and parking maximums in all cases.

Also, to me the book sounds like a perfect description of parking in my hometown, but doesn’t fit with my observations of many older, larger, denser cities. I’m hoping that he will get into more of what parking looks like in cities that don’t have these same parking requirements, or where many parking spots are in paid garages, not free. Am I missing key insights here? Are any of you more familiar with the ITE parking recommendations? From what little I know of them, it seems that they aren’t not based on appropriate statistical methodology and that municipal planners misuse them, but I’m wondering from Shoup’s description whether they intentionally produce biased estimates.

I’m a little late to the party, but just finished Chapter 4 and am greatly enjoying Shoup’s analysis. His critique is powerful and could easily apply to much of city planning. After all, zoning sets de facto land use minimums and maximums as much as any parking regulation.

Also, a recent Planet Money story called “The Cost of Free Doughnuts” makes an interesting companion to the book that I think everyone should listen to. The fact that so much parking has been free for so long will make it difficult to change, particular since many people, even planners, do not think of parking in terms of price at all. Something I hope Shoup addresses more in later chapters.

[…] purchasing of expensive parking spaces is simply passed onto customers and employees in the form of steeper prices and lower wages. The apparently equity-focused goal of reducing congestion for all highway users, in reality […]